Could days of everybody seemingly owning their own cars come to an end soon? The combination of electric and self-driving vehicles could provide the formula for that due to cheap costs associated with it. Instead of making the big decision of owning a specific vehicle, it could be extremely more cost efficient to catch a ride when needed.
London entrepreneurs James Arbib and Tony Seba wrote the “” report, which believes that 95 percent of miles traveled in the United States will be through “on-demand autonomous electric vehicles owned by fleets.” This process has been referred to as “transport-as-a-service,” or TaaS. With autonomous electric cars likely being released by 2021, Americans could save up to one trillion dollars altogether through this service by 2030.
This report sets to refute other analysis that doesn’t believe the electric vehicle will be mainstream in the next decade. Not only will that be a tremendous technology disruption, but the idea of ownership period could dissolve. The costs of TaaS will be rapidly competitive, therefore cutting down the costs dramatically when compared to current passenger services like city taxis and Uber. How low? Anywhere from “4 to 10 times cheaper per mile than buying a new car.”
By 2021, the report estimates that when buying a new car, regardless of if it features an internal combustion engine (ICE) or fueled with 100 percent electric energy, it will cost anywhere from $0.78 to $0.61 per mile. That obviously decreases drastically when the car is paid off, but it’s still is above the $0.30 plateau. Using TaaS cuts that in half, and by using a pool system, it could decrease to as low as a measly $0.03 per mile.
Why is this process so much cheaper? These service EVs will be more efficiently used. The report suggests that individual cars are used just four percent of the time. Based on a study by , over 57 percent of each household in the US has two or more vehicles. That’s a significant waste, yet it makes sense. While separate cars are very convenient for driving to work or completing errands, any sort of lengthy trips are done with the entire family using one vehicle.
Other factors also keep costs down as the report suggests. Electric vehicles will last nearly 2.5 times longer than ICEs in the service industry. Maintenance will be less to fix these new vehicles than traditional models. The rise of autonomy will remove the need for human drivers.
Car manufacturers and oil companies will be fighting to keep this from becoming a reality, especially as soon as the report suggests. They believe the result of this in the next three years will cause ICE vehicles to zero or negative value, all car dealerships to close by 2024, and oil demand will drop 90 percent by 2030. A lot of that sounds gloomy to these industries, but the report also details benefits of this impact.
This includes more opportunities in TaaS, an increase in software-related jobs for self-driving vehicles, and the increase in income and time for people would benefit the economy. Obviously, the decrease in overall cars on the road and fleets running EVs would drastically lower carbon emissions. The report is a fascinating read and shows how drastic things could change with the advancement of electric and autonomous vehicles.